Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A consumer decides to buy a car instead of saving for a vacation, reflecting the lost vacation opportunity.
B
A producer allocates resources to manufacturing more smartphones rather than tablets, maximizing overall production.
C
A government chooses to invest in education over military spending, aiming for long-term economic growth.
D
A farmer decides to plant corn instead of wheat, impacting the total agricultural output but not consumer preferences.
Understanding the Answer
Let's break down why this is correct
Answer
The production possibilities frontier (PPF) shows how an economy can use its resources to produce different goods. When we talk about opportunity cost in consumer choice, we are looking at what we give up to get something else. For example, if a person has $10 and can either buy a book or a movie ticket, choosing the book means they give up the enjoyment of the movie. This trade-off illustrates opportunity cost because it highlights the value of the next best alternative that is not chosen. Understanding this concept helps people make better decisions about how to spend their money based on what they value most.
Detailed Explanation
When a person chooses to buy a car instead of saving for a vacation, they give up the vacation. Other options are incorrect because This option focuses on a producer's choice, not a consumer's; This scenario is about government spending, not individual consumer choices.
Key Concepts
opportunity cost
production possibilities frontier
consumer choice
Topic
Fundamental Economic Choices
Difficulty
hard level question
Cognitive Level
understand
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